On November 5, 2021, the U.S. House of Representatives passed the Infrastructure Investment and Jobs Act, a major infrastructure spending bill, which President Biden is expected to sign into law. The package includes $1.2 trillion for roads, bridges, electric vehicles, broadband, cybersecurity, water resilience and drinking water upgrades, and grid resilience, and other infrastructure priorities.
Now is a key time to engage with federal agency leaders in the Biden Administration as they take the lead in the weeks to come in determining how to fund priority projects, including through grants, pilot projects, R&D programs, tax exemptions and credits, and other incentive mechanisms.
It is also a key time for stakeholders seeking to shape the scope of the Build Back Better (BBB) Act as the $1.75 trillion BBB advances in the House, likely later this month, and in the Senate, likely after a more extensive consideration of the bill.

On November 5, 2021, the U.S. House of Representatives passed the Infrastructure Investment and Jobs Act by a vote of 228-206. The $1.2 trillion infrastructure bill, which passed the Senate by a bipartisan vote of 69-30 in August, includes funding for roads, bridges, electric vehicles, broadband, hydrogen hubs, cybersecurity, water infrastructure, and grid resilience, among other priorities. The measure will now head to President Biden’s desk for signature.

The House also passed a key procedural step that will allow the chamber to vote eventually on the Build Back Better Act, a second spending bill that provides $1.75 trillion for domestic social policy initiatives. Together, the infrastructure package and the Build Back Better Act represent a significant chunk of the Biden-Harris Administration’s social and economic agenda.

The Infrastructure Investment and Jobs Act

The infrastructure package provides $1.2 trillion, including $550 billion in completely new federal spending, for so-called “hard infrastructure” investments, creating funding opportunities across a large swath of U.S. infrastructure sectors and industries, including energy, broadband, water, transportation, electric vehicles and cybersecurity.

Funding will be provided through grants, pilot projects, R&D programs, tax exemptions, loan and loan guarantee programs, and other funding and incentive mechanisms. Federal agencies charged with administering spending and incentive programs will begin issuing directions and specifics in the coming weeks and months. Now is an important time for private sector interests to engage with U.S. policymakers on recommendations to federal agencies on priority projects that align with the new infrastructure bill. An overview of key funding opportunities follows.

  • Energy: The bill provides approximately $65 billion for grants, pilot programs, tax exemptions, and other incentives to support the clean energy and grid resiliency, including in approximate numbers:

- $18 billion for renewables demonstration projects; clean hydrogen, nuclear, solar, wind, and geothermal R&D programs; and hydropower and marine energy programs

- $8 billion for carbon capture and emissions reduction programs, including carbon capture and removal R&D programs, demonstration projects, and grants, and prize competitions

- $8 billion to improve grid resiliency, including through loan facilities and grants to construct transmission facilities and lines

- $4 billion to promote energy storage and recycling, including through energy storage R&D demonstration projects, battery manufacturing and recycling programs, and other energy recycling projects.

  • Broadband: The bill provides approximately $65 billion to expand high-speed internet access, including through grants, tax incentives, and technical assistance programs. In particular, the bill allocates more than $40 billion for states to build and expand broadband infrastructure.
  • Transportation: The bill provides approximately $110 billion to fund new programs and continue existing programs for roads, bridges, rail, transit, airport, and other transportation-related programs.
  • Water: The bill provides approximately $55 billion to upgrade water infrastructure, including lead pipe replacement, by creating grants to develop small water, groundwater, and aquifer storage projects; large-scale water recycling and reuse programs in certain states; and promote resiliency and cybersecurity of water systems, among other projects.
  • Electric Vehicles: The bill provides approximately $7.5 billion to promotes electric vehicles and electric vehicle infrastructure, including through grants to construct charging stations and funding for demonstration and R&D projects.
  • Cybersecurity: The bill would provide direct funding, grants, incentives, and technical assistance to promote cyber resilience within various critical infrastructure industries.

In addition to funding opportunities, the infrastructure bill will impact affected industries in the following ways:

  • Regulatory process changes. For example, the bill seeks to streamline construction and development processes by requiring federal agencies to coordinate reviews and authorization decisions for major infrastructure projects and sets a goal for completing environmental reviews within two years.
  • Made-in-America obligations. Infrastructure funding can trigger Made-in-America obligations—including new domestic content and iron and steel “melting to coating” requirements. As such, potential suppliers would do well to analyze their sourcing in connection with these areas.
  • “Clean hydrogen” definition. For the first time, U.S. law will define “clean hydrogen”— the current definition explicitly includes hydrogen produced from renewables, fossil fuels with carbon capture, utilization, and sequestration technologies, nuclear, and other eligible sources.

Status of the “Build Back Better” Act

Following passage of the infrastructure bill, the House voted for the Build Back Better Act “rule,” which will govern the conditions for the chamber’s final vote on the bill. The vote on the rule represents a compromise between House Democratic progressives, who wanted to pass the infrastructure package and domestic social spending bill in tandem, and Democratic moderates who sought to delay votes on the social spending bill pending additional economic analysis by the Congressional Budget Office. The rule passed on a party line vote, with all Democrats voting in favor. Democratic moderates have publicly agreed to vote for the bill if the Congressional Budget Office confirms that it will not add to the federal budget deficit.

The House-authored Build Back Better Act includes a massive infusion of funding for climate programs and children and family programs, and healthcare programs which will be offset by tax increases on corporations and high-income individuals. Key provisions include:

  • Green Energy: The legislation would encourage investment in green energy by extending the production tax credit and the investment tax credit for the cost of properties producing solar and geothermal energy through 2026. The legislation also provides tax credits for zero-emission nuclear power plants and clean hydrogen hubs.
  • Electric Vehicles: The legislation would invest $1 billion in zero emission vehicle infrastructure grants for states. It would also deploy $950 million in incentive grants for states that make significant emissions reductions or adopt strategies for reaching net-zero surface transportation emissions.
  • Paid Leave: The legislation would allocate $1.5 billion in spending to provide four weeks of paid family leave.
  • Education and Child Care: The legislation would provide $18 billion dollars in funding for universal preschool. It would also provide $100 billion in childcare subsidies for those families earning below 250 percent of their state’s medium income.
  • Housing: The legislation would appropriate $3 billion for the Community Development Block Grant Program (CDBG) to support community housing programs. The legislation would also provide $10 billion to affordable housing in persistent poverty communities and $24 billion to support the Housing Choice Voucher Program.
  • Health Benefits, Drug Pricing, Tax Credits: The legislation would close the “Medicaid Gap” by providing individuals whose income falls below the poverty line but who are not eligible for Medicaid in their states a premium tax credit to enroll in a healthcare plan in the marketplace. It would also lower prescription drug prices for those on Medicare by capping out-of-pocket spending at $2,000 per year for Medicare beneficiaries.
  • SALT Cap: The legislation would increase the $10,000 cap on the state and local income tax deduction to $80,000 through 2030, modifying the existing cap on the amount of individual property and income or sales tax individuals can deduct from their federal taxes.
  • Tax Increases: The legislation would impose a 15 percent minimum tax rate on corporations that report over $1 billion income on adjusted financial statements. It would also impose a 15 percent global minimum tax on profits earned outside the United States.

The House is expected to take up the Build Back Better Act the week of November 15. However, if the House ultimately passes its version of the Build Back Better Act, then the legislation is likely to be heavily scrutinized and ultimately amended by the Senate. The bill will be considered by the Senate using that chamber’s budget reconciliation process, which requires a simple majority to pass and precludes use of the filibuster. Given Democrats’ razor-thin Senate majority and assuming no Republicans will vote for the bill, passage depends on all 50 Democratic Senators voting in support and Vice President Harris breaking the tie. Since several Senators have already announced public opposition to provisions of the House bill, the legislation will very likely be significantly amended during Senate consideration, creating opportunities for businesses, industries, and other stakeholders to weigh in and shape any eventual social spending package.

Pillsbury’s policy and regulatory team is advising clients on the Infrastructure Investment and Jobs Act and BBB to help them secure incentives on an agency-by-agency basis and across the U.S. economy. More detailed analyses on specific items in the bill will be available in the coming days and weeks at Pillsbury’s American Infrastructure Investment Resource Center (pillsburylaw.com).

These and any accompanying materials are not legal advice, are not a complete summary of the subject matter, and are subject to the terms of use found at: https://www.pillsburylaw.com/en/terms-of-use.html. We recommend that you obtain separate legal advice.